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Retailers rush online as COVID-19 speeds up digital disruption
As consumers move increasingly to online shopping, retailers in certain sectors are finding that their brick-and-mortar stores still have a role to play in today's digital world.
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A woman walks past a fashion outlet at a shopping mall in Serpong, Tangerang, Banten, in June 2020. (JP/R. Berto Wedhatama)
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ocal retailers are determined to implement their offline-to-online (O2O) strategy in line with the accelerated adoption of digital technology prompted by the COVID-19 pandemic, but experts say offline shopping still plays a significant part in retail growth.
Publicly listed PT Matahari Putra Prima (MPPA), which owns several retail chains, saw its online sales grow to 5 percent of total sales in 2020, compared to just 0.1 percent in 2019. At the same time, MPPA saw an overall 22 percent drop in net sales in 2020, a year marked by global economic turmoil.
“Now, online sales are nearing double digits” as a share of total sales, MPPA spokesperson Fernando Repi told The Jakarta Post on Tuesday. “We hope it will grow to around 15 percent by the year-end.”
The company’s 2020 annual report shows that the contribution of online channels to total sales grew to Rp 205 billion (US$14.38 million) from a mere Rp 2 billion in 2019.
To capitalize on its online sales growth, MPPA has been rapidly integrating its supermarket chains with e-commerce platforms. Last year, 125 of its outlets offered the Chat & Shop messenger-based shopping feature on WhatsApp and 97 outlets were integrated with Grab’s GrabMart service. The retail group also operated 45 virtual storefronts on Shopee and 23 virtual storefronts on Tokopedia.
MPPA added 95 outlets to Tokopedia earlier this month and plans to add more to the e-commerce platform throughout the year.
Aside from selling through major online marketplaces, MPPA also runs its own e-commerce platform, Hypermart, offering goods from 111 of its outlets as of June, up from only 20 last year. The company also plans to establish five new physical stores this year.
